When Toyota makes a loss, things are terrible for the global automotive industry. When the loss looks to total $1B in just half a year, there is something dreadfully wrong...

I hope Congress is taking note... and right about now Mr Shelby's must be ****ting himself at the thought his state's auto business could be severely impacted...

 

they're still making an overall profit

 

Hey it could be worse, like say . . . . over $2 billion a month.

 

Impossible, you say! Toyota only makes super-cars, unlike our domestic manufactures who make, quoting the Honorless Shelby, .."Crappy cars that nobody wants to buy."

When GM struggles, it is because they are dinosaurs- When Toyota or Honda struggle, it is a GLOBAL CRISIS! Double standard, ya think?

 

yet toyota is still making a profit for the year while GM has been burning billions per month for quite awhile

 

GM hasn't been losing money since the beginning of time. Maybe Toyota is staring down the same road.

 

As I've said in other threads, there is far too much capacity in the automotive industry - both here and abroad. And like in almost any other industry, there is a razor's edge between wild profits (running near or at 100%) and huge losses (running under, say, 90%).

In my opinion, Toyota has not been particularly careful or cautious about its rate of expansion, and while some of those chickens came home to roost in the past couple of years (particularly in the increase in recalls), others were going to take a bit longer. If a company has a goal of expanding at a rate of 10% each year, where does that leave it when times get a bit tough (and, oh, trust me - times are going to be more than "a bit rough" in the auto biz over the next couple of years).

Each year, Toyota looks more and more like the Big 3 in the sixties - arrogant, convinced of its own inherent righteousness, and ultimately vulnerable to forces outside of its direct control.

 

Not even mighty Toyota is immune to a jolted economy and a credit bubble burst. It might be comforting to know this, but then you look at the wild profits they've accrued over the last decade or so and you realize they easily have enough banked to weather the storm. Us? Err, not so much.

 

not surprising. Something tells me Toyota will make it out of this period

 

I couldn't agree more. Toyota has sounded more and more arrogant as they approached number 1 status globally.

 

I have a fundamental problem with companies/leaders that spew blanket policies like "we will grow 10% annually"... especially when they think they can do it forever. It may be totally doable to go from selling 1000 cars/year to selling 1100 cars/yaer. In that case, 10% is a good goal. But if you are already selling 10,000,000 cars/year, it is highly unlikely and unprobable to go for 11,000,000 cars/year. An extra 1,000,000 cars don't just slide through the cracks un-noticed. Same goes for economic growth (i.e. China), and other metrics.

As for Toyota being king of the hill - I've said many times on this board that there is no empire on this earth that has maintained supremacy indefinitely. Every dominion will eventually crumble - history teaches us this. So as for Toyota, they may well make it to the top, but they too will slide down the other side sooner or later. I agree with your account of their aggressiveness and how they have started to take their eye off the ball as the look more into the stands.

 

Yep. Problem is, that includes the good ol' -- and are we starting to see the faulter?

 

Ah some good news....about time!

 

We've been on the way down for a decade or more now.
Economically we are no longer the powerhouse - give that one to China.
Ditto the manufacturing powerhouse.
Ditto the people warehouse.

Our only saving grace is that we are still on the playing board.
Seems like we are riding right along behind England about 100 years in everything we do, huh?

As for GM, they could have been -and still might be again - the world auto superpower if the Chinese market had busted open in the next 3-5 years. Problem there is, think about the oil/gas markets if China reached a vehicle/person ratio similar to the US or Europe!

As others have said, something has to give. Shame it has to be this way though. I'd much rather see the Yugo Syndrome inflicted on Suzuki, Kia, Hyundai, Chery, Geely, and a few others to keep markets lean as opposed to GM Chrysler, and maybe Ford.

 

Toyota has lots 80% of its profits from the second half of the year. I am guessing that next, Toyota will be losing significant money especially if the Yen still gains.

You are right, they are losing less than GM, but they aren't immune from this problem either. If things continue along this path, they maybe losing billions per month in the near future.